Malta’s judicial overhaul, a bold move to secure economic dominance

Garance Limouzy October 11, 2024

In a discussion with SiGMA News regarding the re-establishment of Malta’s Commercial Court, former Minister and Labour Party politician Dr. José A. Herrera underscored the importance of this initiative for the nation’s economy, particularly in relation to the expanding gaming sector. Prime Minister Robert Abela recently announced plans to separate the Commercial Court from the First Court to improve the resolution of commercial disputes and address the increasing complexity of Malta’s evolving economic landscape.

Navigating a surge in complex legal disputes

Prime Minister Abela appears committed to addressing efficiency in the judicial system, especially as commercial cases have increased in complexity alongside Malta’s economic growth. Dr. José A. Herrera also stressed the necessity of establishing specialised courts to manage the influx of commercial litigation involving foreign-registered companies, including many from the gaming industry. The complex nature of disputes in the gaming sector, which often involve intricate regulatory issues and the enforcement of financial agreements, strengthens the argument for reform. The establishment of a dedicated Commercial Court could streamline these processes, allowing for a more focused approach to resolving cases related to the gaming industry.

Ensuring investor and entrepreneur confidence

“A specialised commercial court is essential because investors require a reliable forum to resolve disputes. Strengthening this area of the judicial process is indeed a positive move,” explained Herrera. To maintain investor confidence, he argued that Malta must ensure legal proceedings are both timely and equitable. He also emphasised the importance of having resilient legal frameworks that support businesses, particularly in critical areas like bankruptcy law. Without these frameworks, he explained, promoting entrepreneurship in the country would be difficult. “When a business fails, it should not lead to lifelong ruin for its owner,” Herrera noted, advocating for reforms that would allow individuals to have the opportunity to start anew. The former minister also mentioned the importance of an effective tax policy, stating, “The tax regime must be preserved at all costs, particularly as it has been a key aspect of Malta’s appeal to foreign businesses.”

Fast-tracking the judicial system

Herrera pointed out that the judicial system in Malta still faces challenges, particularly regarding the slow pace of legal proceedings. He recounted conversations with legal experts who noted that delays in the judicial process have deterred potential foreign investors from establishing operations in Malta. Specialised courts, explained Herrera, could effectively address this issue.

The upcoming SiGMA Europe Summit is expected to gather key players from the global gaming sector to discuss the implications of judicial reforms and the evolving regulatory framework. As Malta seeks to reinforce its position as a premier gaming destination, the reintroduction of a Commercial Court is seen by many as a necessary step towards creating a more efficient and investor-friendly legal environment.